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Business Reporter

THE Zimbabwe Revenue Authority (Zimra) has seen improved tax compliance due to its new electronic cargo tracking system (ECTS), which has enhanced monitoring of taxpayers and transit freight in the country.

This is contained in a report released by the World Economic Forum (WEF) in its report titled Growing Intra-African Trade Through Digital Transformation of Border and Customs Services, focussing on the African continent.

According to the WEF report, in the first year of using ECTS, Zimbabwe’s tax regulator managed to intercept a significant number of cases of cargo fraud while the number of new tax registrations recorded went up markedly.

 “Four tankers that entered Zimbabwe with 140 000 litres of diesel were detained after it emerged that while supposedly in transit to the DRC their contents were illegally emptied within Zimbabwe and replaced with an equivalent volume of water, this saved Zimbabwe US$55 650 in excise during the month of the incident,” WEF said in its report.

Zimra’s monitoring and tax collection capabilities have reportedly been strengthened, resulting in the registration of 3 232 new taxpayers while the system picked out irregularities that resulted in 106 cases being referred to audit.

After a series of fraud and tax avoidance, in 2017, Zimra, with the support of the African Development Bank (AfDB and Techno Brain, introduced an ECTS to curb incidents of dumping and reduce the operational cost of transit monitoring and strengthen enforcement of cargo handling regulations.

Economist Namatai Maeresera said, “The ability to move goods swiftly at a sustainable cost helps to build and strengthen regional value chains by increasing the incentive to source raw materials, intermediate goods and finished products within a specific region as these items can be obtained at competitive prices.”

Zimra’s ECTS system uses 21 geo-fenced transit routes covering all important commercial cargo such as break-bulk cargo, containerised cargo and fuel tankers. It is also integrated into the existing ASYCUDA (Automated Systems for Customs Data) World portal.

“If businesses feel safe to transport goods through your roads and rail, it will help the country with the much needed revenue from road usage fees. 

“This also means that the country can now effectively track its income through the systems and gone are the days of offloading and replacing goods in transit,” Mr Maeresera added.

According to the WEF, before the introduction of the ECTS in Zimbabwe, there was widespread dumping of illegal imports on the country’s domestic markets, due partly to the absence of an effective cargo tracking mechanism.

“At the time, only transit data was available in the system and consequently other data was being tampered with and delays in transit often occurred, along with incidents of theft and smuggling. For example, between 2009 and 2016, the smuggling of petrol and diesel increased by almost 600 percent, and it is alleged that smugglers would often disguise petrol and diesel as duty-free paraffin,” the organization said.

Using electronic seal devices that are attached to the transit cargo at the ports of entry has enabled real-time tracking and monitoring of transit cargo from the point of entry into the country to the point of exit.

“These electronic seals are linked to the designated ECTS control room, which reports any violations or tampering to the standby Zimra reaction teams for corrective action, which may include seizure of the cargo or penalties depending on the nature of the offence,” WEF said.